Quarterly profit fell at Westamerica Bancorp (WABC) in San Rafael, Calif., on weaker loan revenue.

The $4.8 billion-asset company reported earnings of $16.7 million in the third quarter, down 16% from the same period in 2012, it announced Wednesday. Per-share earnings of 63 cents met the expectations of analysts polled by Bloomberg.

Westamerica’s net interest income dropped 15%, to $41.2 million, as the bank’s net interest margin fell by 66 basis points, to 4.01%. The company attributed the decline to lower yields on loans and investments and to reduced loan volume as the bank seeks to avoid high-risk, low-yield loans, it said.

Current loan prices “do not provide adequate forward earnings potential, and competitive loan underwriting standards have loosened, which increases credit risk,” the bank said in the news release.

Noninterest income dropped by 1%, to $14.4 million, as service charges on deposits, merchant-processing services and ATM fees all fell. These declines were offset by a rise in fee income from debit cards and trusts.

Lower overhead costs and loan writeoffs helped Westamerica in the third quarter. The bank cut its overhead costs by 5%, to $27.8 million, and reduced its provision for loan losses by 36%, $1.8 million. Net chargeoffs for the first nine months of the year were $4.7 million, compared with $10 million in the same period of 2012.

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